MercadoLibre (MELI) Stock Sinks As Market Gains: Here's Why

Company Overview - MercadoLibre's stock closed at $2,079.96, reflecting a -0.54% change from the previous trading day, underperforming the S&P 500's gain of 0.77% [1] - The stock has decreased by 1.47% over the past month, while the Retail-Wholesale sector gained 5.56% and the S&P 500 gained 4.87% [1] Upcoming Earnings - The upcoming earnings release is highly anticipated, with an expected EPS of$ 11.27, representing a 57.4% increase year-over-year [1] - Quarterly revenue is projected at $5.25 billion, up 39.52% from the same period last year [1] Fiscal Year Projections - For the entire fiscal year, earnings are projected at$ 37.55 per share and revenue at $20.51 billion, indicating increases of +92.96% and +41.74% respectively from the prior year [2] Analyst Estimates and Stock Performance - Recent changes to analyst estimates suggest a positive outlook for MercadoLibre, as these revisions are correlated with near-term stock prices [2] - The Zacks Rank system currently rates MercadoLibre at 3 (Hold), with a 4.01% increase in the consensus EPS estimate over the last 30 days [3] Valuation Metrics - MercadoLibre has a Forward P/E ratio of 55.68, significantly higher than the industry average of 22.87, indicating a premium valuation [3] - The company has a PEG ratio of 1.28, compared to the Internet - Commerce industry's average PEG ratio of 0.82 [3] Industry Context - The Internet - Commerce industry is part of the Retail-Wholesale sector, holding a Zacks Industry Rank of 55, placing it in the top 22% of over 250 industries [4] - The top 50% rated industries outperform the bottom half by a factor of 2 to 1, highlighting the strength of the industry [4]